MoneyMagpie Editor and financial expert Vicky Parry explains how to get a free will to protect your assets
Free Wills Month runs twice a year, in March and October.
It’s designed to encourage people to make sure they have a will in place. The cost of setting up a will is often what puts us off creating one, but without a will your estate could go to someone you don’t want it to.
When you’re doing inheritance planning and creating your will, there are some important things to consider. Be prepared for Free Wills Month by knowing what you want to include before you start.
Why everyone needs a will
A will tells people what you want to happen to your estate when you die. That means your money and assets, but also who should look after your children or who you’d like to keep your pets.
If you die without a will, that’s called dying intestate. Intestacy rules then apply, which means people inherit in a certain order (such as spouse, children, and step-children), with different percentages for each. If you don’t have any family, the state gets everything.
While most people don’t start thinking about a will until their middle age or beyond, every adult in the UK should have one to make sure their estate is handled according to their wishes.
What is Free Wills Month?
Free Wills Month includes a group of charities who understand the importance of having a will – and how few adults in the UK actually have one. We often put it off because we don’t want to face our mortality, or have forgotten to do it, or the cost is prohibitive.
Charities working with Free Wills Month help you (and your partner or spouse) create a straightforward will for free. For more complex wills, there may be a fee – but it will be much less than usual, and you’ll always be told before you go ahead.
Who is eligible?
While the scheme is aimed at people over the ag of 55, some charities will offer support during Free Wills Month for people of any age.
It is worth checking the Ts and Cs of each charity to find out which one might help. If you’re applying as a couple, only one of you needs to be over 55 to qualify.
The free will is a straightforward will. That means if you have complicated plans for trusts, or you run your own business and need to plan the legacy for it, you will incur a small fee.
This will be lower than usual, to continue encouraging people to create a will. You’ll always be told before you start if there is a fee for your more complicated plans.
Consider your current situation
When planning for your will, think about your current situation but also how it might change in the future. For example, if you have young adult children, you may want to include clauses about future grandchildren to avoid having to amend your will each time one is born.
If you have a blended family, with children from a previous marriage, make sure you stipulate who should inherit what by name. Some people choose to do this by percentage or by a set amount. Laying out the details by name helps to avoid any future arguments.
For example, if you said “I want my cash assets to be split equally between my children”, this is unclear if you mean only your biological children or also your step children.
Many people forget about their pets in their will, too. Animal lovers can include a clause that requests a certain person to take over the care of their pet, although that can mean they aren’t taking the pet in but finding them a good home to go to.
To keep your will relevant over time, stipulate your current ‘or future’ pets to ensure any animals in your home are covered at the time of your death. You can also choose to leave an amount to the pet caretaker to cover the cost of your pet’s bills.
Know the nil rate band rules
Inheritance Tax is a contentious subject and is likely to see changes in the near future. But, for now, there is a Nil Rate Band which gives you more before you reach the Inheritance Tax threshold.
This band applies to property you own and live in as your main house. Everyone has a £325,000 tax-free Inheritance Tax allowance. This means there is no tax for your beneficiaries to pay on the part of your estate up to £325,000.
But, if you own your house, this increases by a further £175,000, so you can leave up to £500,000 without tax if you leave your primary residence to your children or grandchildren.
If you’re married or in a civil partnership, the surviving partner inherits the Nil Rate band and allowance. So, a shared estate value can be up to £1m before inheritance tax is due (two £325,000 allowances and two £175,000 Nil Rate allowances combined).
Collate your assets
It’s so easy to forget about bank accounts and pensions that they can be easily missed when someone is sorting out your estate. Make it easy for your executor by creating a list of your assets in one document and ensure you keep it updated.
Set an annual reminder to go over the document and update details for:
- Your stocks and shares ISA
- Cash ISA
- Savings Accounts
- Current accounts
- Pension details
- Stocks outside of an ISA
- Premium Bonds
- Property you own
- Car hire and insurance details
- Utility supplier details
- Details of any business you have a stake in.
This will ensure it is up-to-date and makes it easy to assess your estate.
Think about a digital vault service
Digital vaults are increasingly commonplace as we live our lives online all the time. You can safely store all of your digital information in this vault, just like you would keep jewellery or other assets in a physical bank safe.
Make sure you stipulate in your will which service is your digital vault provider, and who can access it. This will ensure they can handle your accounts and online information easily when you die.
Many platforms also have legacy contacts now. This is where you can indicate who can take over your account when you die, to close it down or continue to manage it.
Consider a charity donation
If you create a will through Free Wills Month, you do not have to leave a legacy to the charity that helps you. However, there is a good reason to leave some of your estate to charity.
If you leave 10% or more of your overall estate as a legacy to a charity or charities in your will, this reduces overall Inheritance Tax owed by your beneficiaries, from 40% to 36%.
For large estate, this small percentage makes a big difference in tax payments and could make a difference between someone inheriting a property they can live in (or rent out) and someone having to sell it immediately to pay the tax bill.
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